Mortgage lenders and housing investors are squaring off in Nevada over a
court decision that has allowed thousands of foreclosed homes to be sold for pennies on the dollar,
in a case that could have big implications on an already-tight
home-loan market across the country. The tension stems from homeowner
associations who put liens on properties when home owners stop paying
their HOA dues. Homeowner associations, similar to lenders, can
foreclose on homes to recoup delinquent payments. Nevada, as well as 20 other states, has laws giving HOA liens priority over first mortgages. That allows HOAs to put a home up for auction and sell it without the mortgage lender's approval, eliminating the first mortgage and then allowing an investor to secure the title of the home, read more.
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